Nvidia profit triples in first quarter

Nvidia Corp.'s net earnings almost tripled in the first quarter, as surging sales helped the 3-D graphics chipmaker continue to grow despite the sluggish economy.

The Santa Clara chipmaker, rated the best performer in the Standard & Poor's 500 index last year, reported a profit of $83.25 million (47 cents per share) for the quarter that ended April 28, a marked increase from $26.65 million (16 cents) in the same period a year ago.

The firm's revenue hit $582.9 million in the first quarter, a more than 140 percent increase from the same quarter last year.

"The company continues to hum along," said Jeremy Lopez, an analyst at Morningstar Inc. in Chicago. "They've been doing this for a long time now."

Neither Lopez nor Morningstar owns Nvidia shares.

The stock finished Wednesday at $38.05, up $1.48, but dipped 77 cents in after-hours trading, as Huang estimated second-quarter earnings to be flat, coming in between 44 cents and 47 cents per share.

Still, he sounded upbeat, saying that the firm's total revenue for this year should end up between $2.3 billion and $2.5 billion, up 70 to 80 percent from 2001.

"I'm incredibly proud of our achievements for our first fiscal quarter," Huang said. "With the strongest product offering in the company's history, we believe we're well-positioned to outgrow the market this year."

Lopez, while admitting Nvidia's impressive run, said that sooner or later the company's growth will slow down.

"The advantage they have now will eventually be competed away. Someone else will come up with a better mousetrap," he said.

Lopez also warned of the effects of the recent price cut on Microsoft's Xbox game console, which accounted for 22 percent of Nvidia's first-quarter revenue. The software giant slashed its price last week from $299 to $199, as Sony cut the price on its PlayStation 2.

"The price war on the consoles is intense," he said. "And I wouldn't be surprised if the cuts are passed on to the vendors as well."